Chinese Oil Investments in Venezuela: Could the Business Case Work in the Absence of Exogenous Motivators?

Abstract

Venezuela constitutes a unique case for examining Chinese NOCs’ CSR commitments. Among Latin American oil producers, Venezuela hosts the biggest amount of Chinese investments and was the largest provider of Chinese oil imports. The country’s hydrocarbons sector promised tremendous fortunes for oil companies. In spite of having the strongest presence, Chinese NOCs were found to be least committed to CSR in Venezuela. This worst-case scenario is explained directly by a non-conductive business environment in which CSR in the oil sector is featured by a top-down, paternalistic philosophy. More importantly, Venezuela’s CSR-unfriendly business environment is causally related to, first, its populist oil regulatory regime under which efficiency and transparency gave way to centralization and ominous government control, and, second, an extremely polarized, politicized civil society in which oppositional forces (often critical of oil projects) were often marginalized and co-opted by the socialist government in existential struggles with pro-government forces.